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Align's High Invisalign Volume Stokes Growth Amid Cost Woes

Zacks Equity Research

On Mar 23, we issued an updated research report on Align Technology, Inc. ALGN. The company is riding on solid product development and a continued focus on international markets. However, the current economic unrest is likely to adversely impact Align Technology’s dental procedures. The stock carries a Zacks Rank #3 (Hold), at present.

Shares of the company have outperformed its industry over the past six months. The stock has lost 20.9% compared with the industry's 28.6% fall.

We are upbeat about the continued momentum in Invisalign volumes across all geographies. The sustained expansion of Invisalign customer base, particularly in teenage patient markets, buoys optimism.

Align Technology, Inc. Price

Align Technology, Inc. Price

Align Technology, Inc. price | Align Technology, Inc. Quote

Stellar revenue growth in iTero scanners and services is also encouraging. The recently-inked distribution deal with Zimmer Biomet is impressive as well. The launch of the iTero Element 5D Imaging System is a crucial development. An upbeat first-quarter 2020 guidance indicates the consistency level in the overall robust growth momentum.

In terms of portfolio enhancement, right at the outset of the fourth quarter in North America, the company unveiled the Invisalign Moderate package, a 20-stage treatment solution designed for consumers whose treatment goals fall between the existing Invisalign Lite and Invisalign comprehensive packages, and can be completed within a period of five months to a year.

The company also introduced SmileView, an online tool created to help potential Invisalign patients visualize a straighter smile before starting with the Invisalign treatment. Strong growth in Invisalign Go systems across all geographies continued with GP dentists and a boost from Invisalign Moderate.

Meanwhile, operating costs flared up in the October-December quarter of 2019. We are also bothered about the current economic uncertainty affecting Align Technology’s dental procedures. The competitive landscape is an overhang too.

Key Picks

Some better-ranked stocks in the broader medical space are ResMed Inc. RMD, Medtronic plc MDT and Hill-Rom Holdings, Inc. HRC.

ResMed has a projected long-term earnings growth rate of 14.4%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Medtronic’s long-term earnings growth rate is estimated at 7.1%. The company presently holds a Zacks Rank of 2.

Hill-Rom’s long-term earnings growth rate is estimated at 11.1%. It currently carries a Zacks Rank #2.

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